A quick guide to the unique NFT token
The world of cryptocurrency and decentralized finance has opened a word dictionary that can scare off new things in the block. The "Unique Token", or NFT for short, is a typical example.
In this article, we will get a quick guide to beginner-friendly "unique tokens". In the end, you will have all the knowledge needed to enter decentralized finance. Addicted!
What is NFT?
Well, before understanding what a "unique token" is, let us first understand the concept of fungibility.
The term "substitutable" is defined as being able to be replaced by another identical item, whether it is currency or a commodity. For example, one dollar coin can be replaced with another one dollar coin. The consistency of value is maintained, and the historical record of the coin does not affect its value. Therefore, even if your 1 dollar coin comes from a taxi driver and my coin comes directly from heaven, it is still the same value to the shopkeeper who sold us the candy. This makes it replaceable.
If a commodity is irreplaceable, it means that the history of the commodity or other factors may make it unequal with other identical commodities.
"Unique tokens" refer to unequal blockchain tokens. These tokens can be anything, such as Cryptokitties, and the value of each kitten is different. Its value depends on the owner's variety, color and condition, and other factors. Therefore, all kittens are not the same, which makes them unique tokens.
An important concept to understand is that coins cannot be tokens. Cryptocurrencies are built on the blockchain and are interchangeable. NFT is a token (such as Cryptokitties) whose value is specified in a specific cryptocurrency (such as Ethereum).
Think of tokens as diamonds. They are unique because the cut, color and clarity of each diamond make their value different from each other. However, the value of all diamonds is specified in currencies such as U.S. dollars.
What are some examples of NFT?
A good example of NFT is digital collectibles. These are the most mature NFTs. Collectibles can be cards (the popular card collection is the champion of Major League Baseball), kittens, etc. Their value is constantly changing according to different factors such as rarity, quality, etc.
Another implementation of NFT is in ticketing. The value of a ticket for a theater seat will vary with factors such as the number of days since the movie was released, and the show time.
Investing in NFT may make sense, but there will always be certain risks. You can buy NFT cards at the price of 1 ETH. As time goes by, the demand may increase, and you can sell them at the price of 1.5 ETH, thereby obtaining a profit of 0.5 ETH. However, its demand may also decline, so you must be willing to take risks and research the market.
How to invest in NFT?
Investing in NFT is much easier than you think. There are digital platforms that allow you to purchase, sell, and exchange NFTs with other people on the network.
KingSwap is a well-known Defi protocol that can provide autonomous liquidity on Ethereum. With KingSwap, you can exchange, buy and sell NFTs. The platform also includes fiat currency transactions, allowing you to easily liquidate investments.
You can also get token rewards by participating in platform activities.
in conclusion
Hope you can clearly know what a unique NFT token is and how to invest. If you think this article is inspiring and attractive, or want to add something to the topic, please let us know in the comments!